When we walk into an arcade one of the first things we see, aside from all the flashing neon lights, is the big black box. Normally a sign hangs above it, signaling an exchange rate, “Four tokens for one dollar,” We slip our flimsy strips of green linen into the big black box and we trust that gold coins with the imprint of a cartoon character on the face will pour out of it. We slip those gold colored tokens into the attractions with the glowing lights and are treated to a game or ride of some sort.
In the arcade we willingly accept that our dollars cannot be used, and that we must slip them into the big black boxes to get our tokens we trust can be used to play the games. It’s an exchange of wealth markers; showing how much wealth we have. Not many of us walk into our bank with dozens of dollar bills to empty into our bank accounts, but for the few of us who do, it is similar to the arcade. We bring in our dollar bills and trust that the teller with the permanent frown etched upon their face converts these bills into numbers that show up on our bank accounts. And with the swipe of the card the frowning teller gives us, we trust that we can pay for a coffee down the street. The teller, just like the arcade’s big black box, takes our wealth markers and changes them into something easier to use.
The people on the island of Yap use ginormous circular limestones with holes drilled through the middle as currency. The people of the island call these car-sized stones, fei. These stones grow so large that sometimes they are unable to be moved and the exchange of each stone is done through word of mouth. The two-ton stone donut standing outside the mayor’s house likely belongs to the butcher two blocks away.
In 1970 France became wary of America’s debt being paid back in dollar bills, knowing the US dollar was backed in gold, they asked for gold instead. However the gold never reached France, instead they just asked America to set aside a pile of gold and label it “France”. Just like the people of Yap, the wealth never reached France’s hands. But through word of mouth, the whole world knew that the gold in the basement of Fort Know with the little sign saying “France” was France’s gold now, not America’s.
Monetary systems rely on the trust of the people using them. Without the trust of the people the fragile system was crash and burn regardless of economic outlooks, numbers, or the demand for goods. This has been true since the dawn of time when trade and barter built the first economies. The worth of a cow was only as much as the buyer’s trust that the cow would live long enough to produce enough milk and meat to cover the expense of the selling their four chickens. When the buyer trusts that the goods will cover their needs, then the trade is made and the economy is able to thrive. Nowadays we don’t handle chickens and cows in our exchanges, but we trust in the value of a swipe of a plastic card. Although it is crazy to believe that a few digits in our bank accounts represents actual currency, but since we trust that it is valuable, we keep our economy from sinking.